Hospital lobbying groups say they're hearing President Donald Trump may be backing off plans to scale back a federal program that requires drugmakers to give discounted products to hospitals that treat a high number of poor patients.
A proposed executive order on drug pricing from the Trump administration leaked late last month contained language that directed the HHS Secretary to find ways to reduce the size of the 340B program.
Sales of drugs under the 340B discount program reached $16.2 billion last year, which was 34% higher than 2015 and accounted for 5% of the total US drug market.
The program has been plagued by complaints that it served mostly hospitals with middle and high income patients. Trump proposal aimed to address these complaints to ensure only the neediest hospitals were participating in the program.
The Affordable Care Act made new categories of hospitals eligible for 340B discounts including some children's hospitals, freestanding cancer hospitals, sole community hospitals, and rural referral centers. In 2015, federal regulators released guidance clarifying who was eligible for the program
In recent days, government affairs staffers at both the American Hospital Association and America's Essential Hospitals, as well as other industry insiders, have heard that the 340B recommendation won't be included final drug pricing executive order whenever its released.
None were sure why it was omitted, but they believe it's likely Trump would rather let Congress decide if there should be revisions to the program.
Multiple requests for comment to the White House were not returned.
Hospitals criticized the proposal, fearing it would kill a lifeline that's helped them deal with one of their most rapidly growing operational costs.
"This could be devastating to many hospitals across the country that count on the 340B program to serve challenged populations," Paul Lee, senior partner at the consulting firm Strategic Health Care said. "Regulatory changes to 340B should not be made without meaningful input from the provider community . There is way to much at stake."
A cadre of Democrats in Congress wrote to Trump in a June 23 letter asking to preserve the program.
Their concern was for patients.
"If, as reported, your administration scales back this program, more Americans of limited means will be forced to choose between health and other basic life necessities, like putting food on the table and a roof overhead for the family," the letter said.
A hearing on oversight of the program is scheduled to take place July 18 in front of the House's Subcommittee on Oversight and Investigation.
If Trump punts the issue to lawmakers, Henry Waxman, for one said he wouldn't be surprised. The former congressman for California and chairman of the consulting firm Waxman Strategies points out that the President's budget proposal calls for new legislation to reduce the cost of the the 340B program.
Spokespeople for PHRMA and BIO, two pharmaceutical trade organizations that have voiced concern over the size of the 340B program declined to comment on the draft of the executive order or reports that the 340 passage had been killed.
